US8781875B2ActiveUtilityA1
System for and method of automatic optimizing quantitative business objectives of sellers (advertisers) with synergistic pricing, promotions and advertisements, while simultaneously minimizing expenditures and discovery and optimizing allocation of advertising channels that optimize such objectives
Est. expiryOct 16, 2027(~1.3 yrs left)· nominal 20-yr term from priority
G06Q 30/00G06Q 30/0272G06Q 30/0244G06Q 30/06G06Q 30/0275G06Q 30/02
89
PatentIndex Score
10
Cited by
6
References
30
Claims
Abstract
An Internet system for and method of automatic optimizing quantitative business objectives of sellers (advertisers) with synergistic pricing, promotions and advertisements, while simultaneously minimizing expenditure and discovery and optimizing allocation of advertising channels that optimize such objectives.
Claims
exact text as granted — not AI-modifiedThe invention claimed is:
1. A method of optimizing one or more of search engine-based advertising, on-line display advertising, and/or television (TV) advertising, the method comprising:
providing for a seller/advertiser, an automated, adaptive computer engine (seller automated engine, or SAEJ) capable of optimizing one or more seller targets in real-time;
evaluating in real-time, within the SAEJ, the seller's advertising options in the context of one or more of current cost-per-click (CPC), of current cost per thousand impressions (CPM), of the status of said targets, and/or of the current market conditions;
computing in real-time one or more bids, taking into consideration one or more of the expense associated with each bid, the current status of said targets, and/or the requisite product and/or service pricing needed to optimize said targets; and
automatically allocating advertising selections.
2. The method of claim 1 further comprising identifying and rank-ordering optimal CPC and/or CPM bids according to a contribution made by each towards meeting one or more seller targets.
3. The method of claim 1 wherein the SAEJ computes an optimum price and/or promotion for an offered product and/or service to further optimize said one or more targets.
4. The method of claim 1 wherein for short term advertisements and/or short term promotions, the SAEJ automatically adjusts at least one of: one or more ad placements and corresponding CPC bids and/or corresponding CPM bids; one or more CPC bids; the number of ads and corresponding CPM bids; product price; and/or service price.
5. The method of claim 4 further comprising, following a short term advertisement and/or short term promotion, the SAEJ reverting back to a normal mode of operation for at least one of: one or more ad placements; one or more CPC bids; one or more CPM bids; product pricing; and/or service pricing.
6. The method of claim 1 wherein the SAEJ optimizes one or more seller targets by computing one or more of CPC and/or CPM advertising channel selection, advertisement placement, bid pricing, product pricing, and/or service pricing.
7. The method of claim 1 wherein said optimizing is effected using one or more of the following equations to maximize seller utility at the end of a time period T:
max
x
ijk
,
b
ijk
(
t
)
,
p
ijk
(
t
)
[
u
(
T
)
]
where
utility of seller at time t is u(t):
u ( t )= w R u R ( R ( t ), R T )+ w m u m ( M ( t ), M T )+ w s u s ( S ( t ), S t ) ;
expected total cumulated revenue up to time t based on cost per click is R(t):
R
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
p
ijk
(
t
)
ⅆ
t
;
expected total cumulated revenue up to time t based on cost per thousand impressions is R(t):
R
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
p
ijk
(
t
)
ⅆ
t
;
expected total cumulated profit up to time t based on cost per click is M(t):
M
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
[
p
ijk
(
t
)
-
C
]
ⅆ
t
-
∑
i
,
j
,
k
x
ijk
∫
0
t
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
;
expected total cumulated profit up to time t based on cost per thousand impressions is M(t):
M
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
[
p
ijk
(
t
)
-
C
]
ⅆ
t
-
∑
i
,
j
,
k
x
ijk
∫
0
t
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
;
expected total cumulated sales volume up to time t based on cost per click is S(t):
S
(
t
)
=
∑
t
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
ⅆ
t
;
expected total cumulated sales volume up to time t based on cost per thousand impressions is S(t):
S
(
t
)
=
∑
t
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
ⅆ
t
;
a first constraint is set as x ijk =0,1;
a single ad-position bid constraint is
∑
k
x
ijk
≤
1
;
an ad budget constraint is
∑
i
,
j
x
ijk
∫
0
T
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
≤
B
k
;
a total budget constraint is
∑
i
,
j
,
k
x
ijk
∫
0
T
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
≤
B
;
i denotes search engine; j denote key word set; k denotes ad position;
x ijk is 1 when engine i, keyword j, and position k is chosen or 0 otherwise;
b ijk is a bid price or cost per impression function of time t for tuple (i,j,k);
w ijk (b ijk ) is the winning probability for tuple (i,j,k) at bid price b ijk ;
p ijk is the item price function of time t if the click through is from tuple (i,j,k);
ρ ijk (p ijk ) is the probability to purchase items or convert an impression into a purchase at unit price p ijk ;
Q ijk is the number of items purchased when a click is from (i,j,k);
n ijk is a total traffic rate function or number of impressions function of time t for tuple (i,j,k);
r ijk is a function of time t for the probability to click on an impression, determining the click through rate for tuple (i,j,k);
C is a fixed cost per item;
u R is a revenue utility function;
w R is a revenue utility weight;
R T is a revenue target;
u m is a profit utility function;
w M is a profit utility weight;
M T is a profit target;
u s is a sales volume utility function;
u s is a sale volume utility weight;
S t is a sale volume target;
when b ijk , p ijk ρ ijk (p ikj ), w ijk (b ijk ), n ijk , and r ijk , are constant and independent of time t, the tuple (i,j,k,) contribution to seller's utility at cumulated revenue R t , profit M t , and sales volume S t and time period (t, t+Δt) is Δu=u(t+Δt)−u(t) where
u ( t )= w R u R ( R t ,R t )+ w M u M ( M t ,M T )+ w S u S ( S t ,S T ),
u ( t+Δt )= w R u R ( R t +ΔR,R T )+ w M u M ( M t +ΔM, M T )= w S u S (S t +ΔS,S T ),
ΔR=N ijk Q ijk r ijk ρ ijk P ijk ,
Δ M=N ijk Q ijk r ijk ρ ijk ( p ijk −C )− N ijk r ijk b ijk ,
ΔS=N ijk Q ijk r ijk ρ ijk ,
N ijk is the total number of impressions during period (t, t+At); and
when seller choice is limited to a single search engine, keyword set, and ad position, the optimization reduces to
max
b
(
t
)
,
p
(
t
)
[
u
(
T
)
]
which is constrainable by price constraints
P L ≦p ( t )≦ P H and
B L ≦b ( t )≦ B H where
P L and P H are floor and ceiling prices for a product and B L and B H are floor and ceiling auction prices for a key word set; and
when b(t), p(t), and n(t) are constants independent oft, N is the total number of impressions for a period and the cumulated revenue, profit, and sales volume equations reduce to:
R ( T )= NQrw ( b )ρ( p ) p,
M ( T )= NQrw ( b )ρ( p )( p−C )− Nw ( b ) b ,
S ( T )= NQrw ( b )ρ( p ) with optimization
max
b
,
p
[
u
(
T
)
]
,
and if the seller has already won the key word auction the optimization reduces to
max
p
[
u
(
T
)
]
.
8. The method of claim 1 wherein the SAEJ automatically computes one or more optimum CPC and/or CPM bids for one or more search engines and/or for one or more web sites and/or for one or more selected sets of one or more key words and/or for one or more selected ad positions and/or for one or more selected products and/or for one or more selected services and/or for one or more selected geographical regions and/or for one or more other specified criteria.
9. The method of claim 1 wherein the SAEJ automatically evaluates and rank orders prevailing CPC bids according to a contribution to one or more seller targets for one or more search engines and/or for one or more selected sets of one or more key words and/or for one or more selected ad positions and/or for one or more selected products and/or for one or more selected services and/or for one or more selected geographical regions.
10. The method of claim 1 wherein the SAEJ automatically computes one or more optimum CPC and/or CPM bids as a function of at least one of: one or more seller targets; one or more statuses of one or more seller targets; one or more statuses of one or more seller targets as a function of time; desired relative degree of emphasis among one or more seller targets; and/or competitive market pricing for CPC and/or CPM for desired ad placement.
11. The method of claim 1 wherein the SAEJ automatically and instantaneously adapts one or more pricing decisions in response to a dynamically altering market place as reflected by variations in a click-through rate (CTR) and/or to dynamically altering competitive pressures reflected by variations in one or more CPC and/or CPM bid prices, in order to optimize one or more seller targets.
12. The method of claim 1 wherein the SAEJ automatically evaluates and rank orders the prevailing CPM bids according to a contribution to one or more seller targets for one or more desirable web sites for display ads and/or for one or more selected sets of one or more contextual key words and/or for one or more selected ad positions and/or for one or more selected products and/or for one or more selected services and/or for one or more selected geographical regions.
13. The method of claim 1 wherein there is provided in real-time dynamic arbitraging of the advertising expenditure among one or more search engine-based advertising channels and/or one or more display ad channels and/or one or more television advertising channels, and in a manner which optimizes one or more seller targets.
14. The method of claim 1 wherein the SAEJ notifies one or more search engines of desired pre-determined characteristics of leads for advertisement opportunities and/or of a desired proportion of leads for advertisement opportunities matching desired pre-determined characteristics.
15. The method of claim 1 wherein the SAEJ makes one or more competitive bids in real-time upon receipt, from a search engine, of a lead and its one or more associated characteristics.
16. A system for optimizing one or more of search engine-based advertising, on-line display advertising, and/or television (TV) advertising, the system having, in combination:
an automated, adaptive, computer engine (SAEJ) provided for a seller/advertiser and capable of optimizing one or more seller targets in real-time;
wherein the SAEJ is capable of evaluating in real-time the seller's advertising options in the context of one or more of current cost-per-click (CPC), of current cost per thousand impressions (CPM), of the status of said targets, and/or of the current market conditions;
wherein the SAEJ is capable of computing in real-time one or more bids, taking into consideration one or more of the expenses associated with each bid, the current status of said targets, and/or the requisite product and/or service pricing needed to optimize said targets; and
wherein the SAEJ is capable of automatically allocating one or more advertising selections.
17. The system of claim 16 wherein the SAEJ is capable of identifying and rank-ordering optimal CPC and/or CPM bids according to a contribution made by each towards meeting one or more seller targets.
18. The system of claim 16 wherein the SAEJ is capable of computing an optimum price and/or promotion for an offered product and/or service to further optimize said one or more targets.
19. The system of claim 16 wherein the SAEJ is configured, for short term advertisements and/or short term promotions, to automatically adjust at least one of: one or more ad placements and corresponding CPC and/or corresponding CPM bids; one or more CPC bids; the number of ads and corresponding CPM bids; product price; and/or service price.
20. The system of claim 19 wherein, following a short term advertisement and/or short term promotion, the SAEJ is capable of reverting back to a normal mode of operation for at least one of: one or more ad placemen; one or more CPC bids; one or more CPM bids; product pricing; and/or service pricing.
21. The system of claim 16 wherein the SAEJ is configured to optimize one or more seller targets by computing one or more of CPC and/or CPM advertising channel selection, advertisement placement, bid pricing, product pricing, and/or service pricing.
22. The system of claim 16 wherein said optimizing is effected using one or more of the following equations to maximize seller utility at the end of a time period T:
max
x
ijk
,
b
ijk
(
t
)
,
p
ijk
(
t
)
[
u
(
T
)
]
where
utility of seller at time t is u(t):
u ( t )= w R u R ( R ( t ), R T )+ w M u M ( M ( t ), M T )+ w S u S ( S ( t ), S t );
expected total cumulated revenue up to time t based on cost per click is R(t):
R
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
p
ijk
(
t
)
ⅆ
t
;
expected total cumulated revenue up to time t based on cost per thousand impressions is R(t):
R
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
p
ijk
(
t
)
ⅆ
t
;
expected total cumulated profit up to time t based on cost per click is M(t):
M
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
[
p
ijk
(
t
)
-
C
]
ⅆ
t
-
∑
i
,
j
,
k
x
ijk
∫
0
t
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
expected total cumulated profit up to time t based on cost per thousand impressions is M(t):
M
(
t
)
=
∑
i
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
[
p
ijk
(
t
)
-
C
]
ⅆ
t
-
∑
i
,
j
,
k
x
ijk
∫
0
t
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
expected total cumulated sales volume up to time t based on cost per click is S(t):
S
(
t
)
=
∑
t
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
ⅆ
t
;
expected total cumulated sales volume up to time t based on cost per thousand impressions is S(t):
S
(
t
)
=
∑
t
,
j
,
k
x
ijk
∫
0
t
Q
ijk
n
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
ρ
ijk
[
p
ijk
(
t
)
]
ⅆ
t
;
a first constraint is set as x ijk =0,1;
a single ad-position bid constraint is
∑
k
x
ijk
≤
1
;
an ad budget constraint is
∑
i
,
j
x
ijk
∫
0
T
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
≤
B
k
;
a total budget constraint is
∑
i
,
j
,
k
x
ijk
∫
0
T
n
ijk
(
t
)
r
ijk
(
t
)
w
ijk
[
b
ijk
(
t
)
]
b
ijk
(
t
)
ⅆ
t
≤
B
;
i denotes search engine; j denote key word set; k denotes ad position;
x ijk is 1 when engine i, keyword j, and position k is chosen or 0 otherwise;
b ijk is a bid price or cost per impression function of time t for tuple (i,j,k);
w ijk (b ijk ) is the winning probability for tuple (i,j,k) at bid price b ijk ;
p ijk is the item price function of time t if the click through is from tuple (i,j,k);
ρ ijk (p ijk ) is the probability to purchase items or convert an impression into a purchase at unit price p ijk ;
Q ijk is the number of items purchased when a click is from (i,j,k);
n ijk , is a total traffic rate function or number of impressions function of time t for tuple (i,j,k);
r ijk , is a function of time t for the probability to click on an impression, determining the click through rate for tuple (i,j,k);
C is a fixed cost per item;
u R is a revenue utility function;
W R is a revenue utility weight;
R T is a revenue target;
u m is a profit utility function;
w M is a profit utility weight;
M T is a profit target;
u S is a sales volume utility function;
u S is a sale volume utility weight;
S T is a sale volume target;
when b ijk , p ijk , ρ ijk (p ijk ), w ijk (b ijk ), n ijk , and r ijk are constant and independent of time t, the tuple (i,j,k) contribution to seller's utility at cumulated revenue R t , profit M t , and sales volume S t and time period (t, t+Δt) is Δu=u(t+Δt)−u(t) where
u ( t )= w R u R ( R t ,R T )+ w M u M ( M t ,M T )+ w S u S ( S t ,S T ),
u ( t+Δt )= w R u R ( R t +ΔR,R T )+ w M u M ( M t +ΔM,M T )+ w S u S ( S t +ΔS,S T ),
ΔR=N ijk Q ijk r ijk ρ ijk p ijk ,
Δ M=N ijk Q ijk r ijk ρ ijk p ijk ( p ijk −C )− N ijk r ijk b ijk ,
ΔS=N ijk Q ijk r ijk ρ ijk ,
N ijk is the total number of impressions during period (t, t+Δt); and
when seller choice is limited to a single search engine, keyword set, and ad position, the optimization reduces to
max
b
(
t
)
,
p
(
t
)
[
u
(
T
)
]
which is constrainable by price constraints
P L ≦p ( t )≦ P H and
B L ≦b ( t )≦ B H where
P L and P H are floor and ceiling prices for a product and B L and B H are floor and ceiling auction prices for a key word set; and
when b(t), p(t), and n(t) are constants independent of t, N is the total number of impressions for a period and the cumulated revenue, profit, and sales volume equations reduce to:
R ( T )= NQrw ( b )ρ( p ) p,
M ( T )= NQrw ( b )ρ( p )( p−C )− Nw ( b ) b,
S ( T )= NQrw ( b )ρ( p ) with optimization
max
b
,
p
[
u
(
T
)
]
,
and if the seller has already won the key word auction the optimization reduces to
max
p
[
u
(
T
)
]
.
23. The system of claim 16 wherein the SAEJ is capable of automatically computing one or more optimum CPC and/or CPM bids for one or more search engines and/or for one or more web sites and/or for one or more selected sets of one or more key words and/or for one or more selected ad positions and/or for one or more selected products and/or for one or more selected services and/or for one or more selected geographical regions and/or for one or more other specified criteria.
24. The system of claim 16 wherein the SAEJ is capable of automatically evaluating and rank ordering prevailing CPC bids according to a contribution to one or more seller targets for one or more search engines and/or for one or more selected sets of one or more key words and/or for one or more selected ad positions and/or for one or more selected products and/or for one or more selected services and/or for one or more selected geographical regions.
25. The system of claim 16 wherein the SAEJ is capable of automatically computing the one or more optimum CPC and/or CPM bids as a function of at least one of: one or more seller targets; one or more statuses of one or more seller targets; one or more statuses of one or more seller targets as a function of time; desired relative degree of emphasis among one or more seller targets; and/or competitive market pricing for CPC and/or CPM for desired ad placement.
26. The system of claim 16 wherein the SAEJ is capable of automatically and instantaneously adapting one or more pricing decisions in response to a dynamically altering market place as reflected by variations in a click-through rate (CTR) and/or to dynamically altering competitive pressures reflected by variations in one or more CPC and/or CPM bid prices, in order to optimize one or more seller targets.
27. The system of claim 16 wherein the SAEJ is capable of automatically evaluating and rank ordering prevailing CPM bids according to a contribution to one or more seller targets for one or more desirable web sites for display ads and/or for one or more selected sets of one or more contextual key words and/or for one or more selected ad positions and/or for one or more selected products and/or for one or more selected services and/or for one or more selected geographical regions.
28. The system of claim 16 wherein the SAEJ is configured for real-time dynamic arbitraging of advertising expenditure among one or more search engine-based advertising channels and/or one or more display ad channels and/or one or more television advertising channels, and in a manner which optimizes one or more seller targets.
29. The system of claim 16 wherein the SAEJ is configured to notify one or more search engines of desired pre-determined characteristics of leads for advertisement opportunities and/or of a desired proportion of leads for advertisement opportunities matching desired pre-determined characteristics.
30. The system of claim 16 wherein the SAEJ is configured to make one or more competitive bids in real-time upon receipt, from a search engine, of a lead and its one or more associated characteristics.Cited by (0)
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